Network Equipment Technologies, Inc., (NET) is a leader in networking technology, specializing in voice over Internet Protocol (VoIP) and innovative network solutions designed for enterprise and government agencies worldwide. NET manufacturers communications
equipment and is a global provider of network technologies with deep experience in IP, TDM, and ATM protocols and signal translation. NET has 265 employees and is based in Fremont, California, with offices in the United States, the United Kingdom, France,
China, Japan, Australia, and Singapore. Recently, NET acquired Quintum Technologies to bolster its VoIP offerings to meet high-growth, evolving consumer demands.
NET decided to replace its Oracle enterprise resource planning (ERP) system in 2006 because of its high operating costs and the complexities of using and maintaining the system. Despite seven years of using Oracle, NET found that many of its business processes
required workarounds and manual efforts, resulting in myriad inefficiencies, dissatisfied users, and, ultimately, lower user productivity.
As NET considered options for replacing its Oracle 11i E-Business Suite, Microsoft Dynamics® AX quickly emerged as a front runner because of its favorable return on investment, ease of use, and its ability to satisfy NET’s most complex business requirements.
NET selected Microsoft Dynamics AX 4.0 for High Tech and worked with Fullscope, its system implementation partner, to reach its first release in September 2007. By choosing Microsoft Dynamics AX, NET saved more than U.S.$1.5 million in implementation costs
versus upgrading its Oracle system. NET has since upgraded to Microsoft Dynamics AX 2009, a process that NET’s internal IT department completed within three months for only U.S.$38,000.
User Productivity at NET and Case Study Methodology
End-user productivity resulting from switching to Microsoft Dynamics AX was assessed along five dimensions: usability and familiarity, transactional efficiency, collaboration, business insight, and flexibility. To determine productivity gains at NET, users
in Sales and Marketing, Finance, and Operations were asked 40 closed-ended questions on a seven-point scale pertaining to productivity improvements resulting from Microsoft Dynamics AX. Questions for these interviews were drawn from the industry-standard SUMI1
user productivity inventory and past Microsoft® research on user productivity. NET’s responses were totaled and compared against a benchmark of 100 midmarket and enterprise companies with ERP systems (shown below).
NET demonstrated superior user productivity overall compared to recent ERP deployments at other companies. Examining NET’s score across the five productivity dimensions below, NET exceeded the benchmark in every category. In addition, NET excelled in transactional
efficiency, collaboration and usability and familiarity, with scores of 35 percent, 27 percent, and 27 percent higher than the benchmark respectively.
To explore the drivers behind these scores, these five productivity dimensions are explored in turn to understand NET’s experience in more detail.
Usability and Familiarity
Employees at NET singled out Microsoft Dynamics AX for its ease of use, which has translated into reduced training time and greater proficiency with the application. The application’s look and feel is familiar to most users. One employee commented
that the navigation, menus, lists, and commands in Microsoft Dynamics AX resemble Microsoft Office applications such as Microsoft Office Word, Microsoft Office Excel®, and Microsoft Office Outlook®, which she already uses every day in her work. “I can right-click
on a page and immediately see all of the commands, just like in Office Word,” she says. “Microsoft Dynamics AX is so easy because it’s like most of the other software I use.”
Additionally, users have commented that critical information is easy to find and that it is easy to navigate around the application. Similar to navigation buttons on Web browsers, Microsoft Dynamics AX has back and forward arrow buttons for intuitive navigation
that allow users to move from one task to the next. Users also describe their fondness of the home menu screen, which displays the recently used and popular destinations for quick and easy access to the tasks and reports they use most.
Familiarity with the features in Microsoft Dynamics AX means that new hires are able to learn the application quickly. And, users who have been using Microsoft Dynamics AX are comfortable learning new functions and taking responsibility for new business
processes. Users at NET describe their training experience with Microsoft Dynamics AX as taking one-tenth the time of the Oracle system. As an example of how Microsoft Dynamics AX makes it easy for users to learn the software, NET was able to train its entire
Hong Kong office in three days, despite a language barrier and the fact that most users had never used an ERP system.
Beyond the application’s overall ease of use and familiarity, it reduces the training time required with tools such as the Task Recorder. This feature lets team members teach end users how to complete various tasks that arise in their business on a daily
basis such as purchase requisitions. The NET Director of IT says of the task recorder, “It’s one of my favorite tools ever because it saved us time in conveying to users in different offices how they should handle certain tasks. It’s a great way for someone
new to get up to speed with how our business works and the software everyone uses.”
Transactional efficiency refers to a user’s effectiveness in executing repetitive tasks, the efficiency of the user interface and the speed and reliability of the ERP system. At NET, Microsoft Dynamics AX has improved employees’ transactional efficiency by
eliminating manual processes and streamlining existing ones. Now, employees are more productive, make fewer errors in data entry, and increase the time they can spend making critical decisions.
With Microsoft Dynamics AX, employees in Sales and Marketing are more efficient because they can process orders faster and have eliminated manual tasks. For instance, order entry and management in Microsoft Dynamics AX requires a lot less “clicking and tabbing”
than Oracle and helps guide users so that the orders they create are less error prone. NET’s business involves many custom or built-to-order products, which means users have to understand the business rules of how components can or cannot be combined. Since
the product configuration rules were not automated previously, employees often created sales orders that used the incorrect components. Also, employees were previously required to enter serial numbers for each part added to the order. This resulted in processing
errors that could be time consuming to correct and held up the entire sales and ordering process.
With Microsoft Dynamics AX, NET has a product configurator that automatically identifies parts with prices in the system. The product configurator takes the guesswork out of creating orders and increases accuracy because business rules are in place so that
only certain options or features are available for a given product on the order. Moreover, required information is defaulted onto the sales order for users. NET’s Director of Sales and Business Development finds that, “On the most configured orders, Microsoft
Dynamics AX takes half the time it did when we used Oracle.” Even after NET’s acquisition of Quintum, whose order management volume is many times the traditional business, NET has been able to do more without increasing employee headcount. In addition, the
product configurator in Microsoft Dynamics AX helped NET identify and remove phantom parts, reducing the 37,000 item master to 8,000 unique parts.
Similar to Sales and Marketing, Finance employees cite transactional efficiency gains associated with Export to Excel feature in Microsoft Dynamics AX as a significant contributor to their day-to-day productivity. In Oracle, NET’s assistant controller was
exporting reports to Office Excel five times a day on average. “Each time I did a report, exporting took me between 10 to 15 minutes, because I had to convert to text and then manually format it.” In Microsoft Dynamics AX, exporting has been reduced to a few
simple clicks to cut the data and export it, saving her as much as an hour a day.
||In the Oracle system, it would take hours to complete an order for one of our larger products. With Microsoft Dynamics AX, it takes just minutes.
| Carmel Wynkoop, IT Director, NET
Additionally, Finance employees benefit from the ability to combine their commercial and federal organizations into a single instance in Microsoft Dynamics AX so that authorized users can easily change between organizational views. Previously, Oracle required
that users log out and log back in to the system to see different subsidiaries. For shared company services, this meant that many users had to endure “the time consuming process of logging in and out of (the two organizations].” Employees also spent a great
deal of time correcting data that they accidentally entered under the wrong subsidiary. Most importantly, separate views in Oracle meant many efforts were duplicated or involved more time. With Microsoft Dynamics AX, this duplication was minimized; for instance,
the month-end close took twice as long in Oracle than it now does in Microsoft Dynamics AX.
Operations end-users appreciate the easy report-filtering mechanism in Microsoft Dynamics AX. Oracle did not allow users to filter reports by vendor name or part number. NET’s materials manager recalled, “I would manually go through the POs, searching for
the manufacturer of a part number, which consumed a good deal of my time.” By contrast, Microsoft Dynamics AX lets employees filter by any data field with a single mouse click, making it much more efficient to find information. Much like a pivot table in Office
Excel, employees can arrange and view the information that they need instantly and run reports in seconds.
Collaboration between NET employees by using Microsoft Dynamics AX ensures people interact in an efficient way and on the right issues. NET, whose core business is voice and data products, was drawn to Microsoft Dynamics AX for its ability to combine its own
unified communications technologies with its ERP system. This was something Oracle could not do. NET employees now regularly use Microsoft Dynamics AX to collaborate with others in real time. If there are questions on a purchase requisition approval, they
can send an instant message or even place a phone call from within the application. These unified communications technologies help users eliminate slack time for critical workflows and to communicate with employees in other offices or with remote users.
Unified communications in Microsoft Dynamics AX, combined with flexible security levels, provides appropriate and immediate visibility for NET employees across different locations. For instance, NET employees in Hong Kong, who build a similar product to
the New Jersey office, can view or even modify their bill of materials to ensure consistency and quality of manufacturing. The security levels NET has defined are flexible to meet their changing business needs and provide access to information in real time.
Microsoft Dynamics AX facilitates NET’s ability to maintain and communicate between multiple locations effortlessly.
The flexible workflow and seamless integration of Microsoft Dynamics AX with Microsoft Office SharePoint® Server has removed steps required to execute key business processes. In Oracle, adding details to a part in NET’s item master was limited to only the
part number. To update such common fields as price, product model group, or whether a part was interchangeable with another, NET employees would pass around a sheet of paper to be signed and approved before manually updating their item master. NET streamlined
this process by automating the transfer of data between Office SharePoint Server and Microsoft Dynamics AX. NET employees now simply modify the fields in Office SharePoint Server, which triggers an approval process where the appropriate people are immediately
notified. After the approval process is completed in Office SharePoint Server, the product details are loaded into Microsoft Dynamics AX on a nightly basis.
Microsoft Dynamics AX provides improved visibility across NET’s business groups and processes so that management can make better-informed decisions more rapidly.
A key example of how Microsoft Dynamics AX helps NET achieve greater business insight is the way Microsoft Dynamics AX ensures that NET complies with government pricing regulations and avoids costly fines. Because NET sells to both commercial and government
businesses, they must make sure that the government is receiving the best price according to U.S. General Services Administration (GSA) requirements. This complex issue requires a very flexible reporting framework. In Oracle, NET did not have a check for selling
price versus discount price, so the person responsible for the GSA reports would have to manually review pricing and discounts on commercial orders. One of the employees recounted that the manual effort “was at least one-tenth of my responsibility, but required
me to block time out on the weekends so that I would not be interrupted or make a mistake.”
In Microsoft Dynamics AX, NET is able to retain better control and visibility on price levels for commercial business and government contracts. NET developed an automated price change database in Office SharePoint Server, which updates Microsoft Dynamics
AX on a daily basis. Entering the part into the Office SharePoint Server database kicks off the workflow and passes it along for the appropriate manager’s approval and automated document control to make sure the part number is there before automatically updating
the price in Microsoft Dynamics AX. Now, it takes five seconds because it’s just a simple review and NET is now confident that they are GSA compliant.
NET is using Microsoft SQL Server® Reporting Services with Microsoft Dynamics AX to generate reports and, ultimately, business insight for the company. Employees at NET shared that creating reports by using SQL Server Reporting Services “is easier and faster
than Oracle and requires much less technical expertise even when the reports involve complex joins of data.” This allows NET to create, schedule, run reports, and easily retrieve scheduled reports. One additional benefit of SQL Server Reporting Services is
that it uses the same security and access control rules specified in Microsoft Dynamics AX. In Oracle, NET had to create a separate set of security rules in the reporting tool, which meant IT had to duplicate its efforts to configure and maintain security
and access controls rules.
By switching to Microsoft Dynamics AX, NET significantly reduced its costs to administer its ERP system and greatly improved developer productivity. IT is now more self-sufficient since personnel can make changes quickly and configure the application to meet
employees’ needs. Also, NET can now adapt its software to the needs of its most critical business processes.
To maintain its Oracle ERP system, NET employed a team of 10 Oracle business analysts. After switching to Microsoft Dynamics AX, NET reduced its internal development team to three people, which resulted in savings of U.S.$1.3 million annually in maintenance
fees. The small IT team has become proficient in maintaining Microsoft Dynamics AX; in fact, NET upgraded from Microsoft Dynamics AX 4.0 to Microsoft Dynamics AX 2009 in only three months, largely by its internal IT team, with assistance from subject matter
experts from partner Fullscope. One feature specific to Microsoft Dynamics AX that made this upgrade possible was the compare tool from Microsoft. With very little documentation around customizations, “it was very easy for someone like us who hadn’t worked
with Microsoft Dynamics AX upgrades before,” said a Business Analyst at NET.
NET’s developer team was able to learn Microsoft Dynamics AX quickly. The three in-house NET developers had never worked with Microsoft Dynamics AX before version 4.0 being deployed and were previously a customer support representative, a .NET programmer,
and an Oracle developer. Since deploying Microsoft Dynamics AX, NET’s developers have become proficient and are able to efficiently accommodate requests from the user community. One of the usual requests that NET’s developers receive from employees is for
changing and removing fields. A developer at NET explained that “like in Microsoft Word, I can just highlight and right-click to get options to change the fields. In Oracle, I had to go to the field, link it to a database, and then deploy it back, which was
tedious compared to the mere seconds it takes in Microsoft Dynamics AX.” By contrast, in Oracle, there were always more than 100 trouble tickets assigned to the developers.
The ability to integrate third-party or proprietary software with Microsoft Dynamics AX has enabled NET to improve its licensing process and realize incremental licensing revenue. Previously, NET was unable to connect its licensing system with its Oracle
ERP system, so the company had to send out a dongle (a thumb drive used for security) that contained its license keys. This approach limited the licensing models that NET could apply such that trials and upgrades were not possible. To remedy this, the developers
at NET created a licensing tool in .NET that has real-time integration with Microsoft Dynamics AX. Any time a license needs to be put on a box, it finds the sales order and associates the license so that NET’s contract manufacturing partner can copy and paste
the license as they’re building the product. Now, NET can sell upgrades and generate the appropriate licenses, resulting in increased license revenue and improved license tracking. NET’s Director of IT noted generally that “with Oracle, we had to adjust our
most critical business processes for our ERP software. Now with Microsoft Dynamics AX, we can easily adapt our ERP software to our business needs.”
NET’s employees in Finance, Operations, and Sales and Marketing report substantial productivity gains with Microsoft Dynamics AX 2009 compared against an industry benchmark. Employees identify that Microsoft Dynamics AX has helped NET lower its annual ERP
maintenance costs, increase licensing revenue, improve GSA compliance, optimize employee collaboration, expedite order entry, eliminate manual error-prone tasks, and streamline many inefficient workflows and day-to-day activities.
You can read more about the Microsoft Dynamics AX for High Tech Industries solution that Network Equipment Technologies chose in
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